FTC Announces Charges against Diploma Mill Operators

Posted: February 16, 2016

Diploma Mill: “A company that offers ‘degrees’ for a flat fee in a short amount of time and requires little to no course work.” Source: Federal Trade Commission. On February 10, the Federal Trade Commission (FTC) announced charges it filed against two diploma mill operators. In the two complaints filed in the U.S. District of Arizona, the FTC outlined similar allegations against the operators. In particular, the FTC highlights that each “school” website makes claims that consumers can earn a high school diploma that can be used when applying for a job, seeking a promotion or attempting to join the military. In order to earn this “diploma”, consumers only have to pay a fee and pass a test that requires no coursework or preparation. Instead, “life experience” counted towards credit for course completion. These operators charged $135-$349 for the services offered. Further, the operators also each had separate graduate and verification offerings. The verification service allowed consumers to provide a contact for the “school” that would “enable the potential employer to speak directly with a guidance counselor at our school to confirm a particular individual received a passing score.” The goal of this offering was to help ensure that “most employers” would accept the diploma as a legitimate alternative to a traditional high school diploma or GED. Unfortunately, as the FTC alleged, the “diplomas” were “invalid” and “virtually worthless” as most employers rejected the certificates. Additionally, consumers were not able to reach a live person once they earned their “diplomas.” To make matters worse, the operators allegedly buried any disclaimer regarding the legitimacy of these degrees in the “terms and conditions” portion of the school websites using a small font size that was unlikely to be noticed by the average consumer. There are numerous alleged diploma mills involved in this action including (but not limited to): Aberdeen Academy, Auburn Canyon High School, Glacier Online High School Academy, Mayflower High School Academy Online, Paramont High School Online, Columbia EEOC claimed the employer failed to maintain records related to criminal background & history checks assessments that the employer conducts as part of its hiring processNorthern High School, Capitol High School, Penn Capitol High School, Stafford High School, Franklin High School and Lincoln High School. The FTC also alleged that the operators created false accreditation institutions by the names of American Accreditation Council for Higher Education and the Capitol Network for Distance Learning Programs. The creation of false accreditations is a common scheme involved in diploma mill operations in an attempt to add an air of legitimacy to the school in question. 1 In addition to announcing the charges filed, the FTC released new guidance for consumers to better educate them regarding diploma mills. As outlined in the educational piece, the FTC points to several common signs of diploma scams:

• You can earn a diploma from home without any time invested.
• You must pay for the diploma.
• The school claims to be affiliated with the federal government.

The FTC also noted that to earn a high school equivalency diploma there are four tests that are accepted by at least one state: GED, HiSET, TASC, CHSPE. These legitimate tests are all administered in person, proctored, closed-book and scheduled for specific times and dates. The diploma mill problem is not isolated to the United States. Internationally there is a significant problem as well, especially in countries with large populations such as India and China. Employers should work with a reputable background screening provider to carefully vet the educational credentials of all qualified candidates, including educational experience outside the United States. 1 One important note regarding the issue of accreditation. If an organization is not accredited, it does not automatically mean it is a diploma mill. The organization may be an entirely legitimate operation that is exempt from accreditation requirements (a religious institution for example) or is an organization in the process of earning accreditation. In addition, many states do not require accreditation or licensing for private schools. For example, the Florida Department of Education does not recognize institutions that accredit private schools. While Florida Statute Section 1002.42 requires K-12 private schools to register with the Department of Education, there are no official determinations as to whether a private school is legitimate or not.